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Cantor 'failed to report suspicious transactions'

The Central Bank has fined Cantor Fitzgerald Ireland Limited €452,790 for breaches of its obligations under EU rules designed to combat market abuse.

The regulator said that Cantor had failed to report some identified suspicious transactions that might have indicated market abuse.

It also said that the financial-services firm had failed to put in place effective governance arrangements to detect and report suspicious orders and transactions. 

Six-year period

According to the Central Bank, Cantor also failed to consistently document its analysis of whether it considered certain orders and transactions to be suspicious and failed to consistently escalate suspicious transactions internally.

These breaches, to which the firm has admitted, covered a period of more than six years between March 2017 and June 2023.

The regulator had initially decided on a fine of €646,840, but this was reduced by 30% due to a settlement discount, which the bank can offer if an investigation is resolved by agreement.

A spokesperson for Cantor said: “We are pleased to have resolved this matter with the Central Bank of Ireland related to issues which were fully remediated by June 2023”.

‘Key safeguard'

Colm Kincaid (Central Bank director of enforcement) said that article 16 of the EU’s Market Abuse Regulation required firms to identify and report to the Central Bank any suspicious transactions or orders (STORs) that might indicate potential market abuse.

“This legal requirement is a key safeguard in our system to protect securities markets from abuse, and firms must have processes in place that are effective to ensure STORs are reported,” he stated.

‘Market abuse’ includes insider dealing, unlawful disclosure of inside information, and market manipulation. 

“It erodes confidence in the integrity of markets and has the potential to increase the cost of trading, distort the playing field, and undermine fair competition, to the detriment of both investors and firms looking to securities markets to raise necessary funding,” Kincaid said.

He called on all financial firms to review their STOR reporting in the light of the Central Bank’s findings in this case, to ensure that they were reporting all reasonable suspicions to the Central Bank.